Markets extend early gains; trade near intra-day high level

Indian equity benchmarks added gains to continue its firm trade in the late afternoon session hovering near the highest point of the day on the back of value-buying by funds and retail investors ahead of Reserve Bank of India's (RBI) 3rd bi-monthly policy review. Good progress of monsoon, recovery in Chinese macroeconomic data, increase in FIIs' capital inflow and value-buying by investors after recent sell-off supported the investor-sentiments. Foreign investors have pumped in $6 billion into the Indian securities market in July, taking their overall net inflows since the beginning of 2014 to more than $26 billion, driven by an investment-friendly government at the Centre. Barring healthcare, all of the sectoral indices were trading in green. Realty stocks were trading higher amid reports that the Government is mulling to introduce the Real Estate Development Regulatory Bill in the winter session of the Parliament to crack the whip on unscrupulous builders. Apart from blue chips, broader indices too equally participated in the rally with both mid and small cap indices were trading up by over 0.60%.

TV Today Network has soared around 14% to Rs 157 after reporting an over two-fold increase in standalone net profit at Rs 32.79 crore for Q1FY15 on back of strong operational performance.  Avanti Feeds has zoomed around 16% to Rs 1,148 after reporting a robust 80% yoy jump in net profit at Rs 25.62 crore for Q1FY15 on back of strong operational income.

On global front, Asian equity indices were trading in red with Taiwan Weighted up by 0.69% and Straits Times Index down by 0.64% as global investors weighed a smaller-than-forecast increase in US payrolls and the bailout of a Portuguese bank. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 7,650 and 25,500 levels respectively. The market breadth on BSE was positive, out of 2,481 stocks traded, 1,586 stocks advanced, while 783 stocks declined on the BSE.

The BSE Sensex is currently trading at 25,633.40 up by 152.56 points or 0.60% after trading in a range of 25,688.21 and 25,531.38. There were 24 stocks advancing against 6 stocks declining on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.65%, while Small cap index up by 1.04%.

The gaining sectoral indices on the BSE were Consumer Durables up by 2.33%, IT up by 1.55%, Capital Goods up by 1.05%, FMCG up by 1.01% and Auto up by 0.99%. On the flip side, Healthcare down by 0.12% were the losing indices on the BSE.

The top gainers on the Sensex were Infosys up by 2.71%, Hindalco Inds up by 1.76%, Tata Motors up by 1.62%, Axis Bank up by 1.41% and L&T up by 1.16%. On the flip side, HDFC down by 1.90%, Sun Pharma down by 1.01%, Coal India down by 0.96%, Cipla down by 0.68% and Bharti Airtel down by 0.63% were the top losers on the BSE. 

Meanwhile, amid continuing geo-political tensions in the Gulf and the other Middle Eastern countries, Finance Ministry has made it clear that it cannot lower its guard on the external front and ease gold import curbs as developments in Iraq and other countries can have adverse implications on the country's Current Account Deficit (CAD) situation. Revenue Secretary Shaktikanta Das has stated that though CAD problem has been contained, India needs to be very cautious as global uncertainties in gulf countries can push up oil prices inflating the import bill, adding to pressure on the CAD. .

The current account deficit (CAD) narrowed to $32.4 billion (1.7% of GDP) in FY14 as compared to $87.8 billion (4.7% of GDP) in FY13 mainly driven by the lower gold imports. Gold and silver imports fell by 40.02% to $33.46 billion in FY14 due to the stern Government’s norms like high customs duty of 10% and existing 80/20 rule under which 20% of all gold imports by importers has to be re-exported.

Gold is the second largest import item for India after crude oil and is mainly utilised to meet the demand of jewellery industry. Over the past few months, gems and jewellery industry has been demanding the government to lower curbs on gold imports as these restriction has been adversely impacting the revenue of the industry players. Indian gems and jewellery industry account for around 13% of the country total exports. During FY14, India’s gems and jewellery exports declined by 8.82% to $39.52 billion from a year earlier due to prevailing restrictions. 

The CNX Nifty is currently trading at 7,655.60 up by 53 points or 0.70% after trading in a range of 7,671.70 and 7,622.05. There were 21 stocks advancing against 9 declining on the index.

The top gainers of the Nifty were HCL Tech up by 2.88%, Infosys up by 2.60%, Mc Dowell up by 2.51%, NMDC up by 2.39% and Hindalco Inds up by 1.98%. On the flip side, HDFC down by 2.01%, DLF down by 1.05%, Sun Pharma down by 1.03%, Coal India down by 0.82% and Bharti Airtel down by 0.80% were the major losers on the index.

Asian equity indices were trading mixed; Hang Seng up by 0.42% to 24,635.56, Shanghai Composite up by 1.19% to 2,211.28, Jakarta Stock Price Index up by 0.04% to 5,090.72 and Taiwan Weighted up by 0.69% to 9,330.19. While, Straits Times Index down by 0.64% to 3,323.77 and Nikkei 225 down by 0.27% to 15,480.88